1. FX Outlook
  2. Daily FX Report


Euro-Zone industrial production declined 4.1% for March after a 1.5% increase the previous month with a year-on-year decline of 1.4% from a 2.0% gain previously. The data maintained market reservations surrounding the Euro-Zone outlook.

The German economy Ministry also stated that the base growth dynamics of the economy had markedly weakened recently.

The EU Commission, however, revised up the 2023 and 2024 GDP forecasts slightly with this year’s GDP growth forecasts revised to 1.1% from 0.9%. The 2023 inflation forecast was revised to 5.8% from 5.6% with the 2024 forecast at 2.8% from 2.5%.

The US New York Empire manufacturing index slumped to -31.8 for May from 10.8 previously and well below consensus forecasts of -3.7. There was a very sharp slide in new orders with sharp contraction on the month. There was a similar position for shipments while unfilled orders also dipped into contraction.

There was a slightly slower decline in the rate of employment while the inflation readings were little changed with a slightly stronger rate of increases in prices paid.

Companies were slightly more optimistic over the outlook while employment is expected to decline and inflation pressures are expected to ease slightly.

The dollar edged lower in an immediate reaction to the data, but losses were limited with the Euro unable to test the 1.0900 area.

Tight ranges prevailed on Tuesday with the Euro trading around 1.0870 as the dollar resisted significant losses amid an element of defensive support.


The dollar secured a limited further net advance ahead of Monday’s US open, although ranges were contained.  Atlanta Fed President Bostic stated that rate cuts were not part of his baseline. He added that the bias for action might be for a further small increase in rates, but the appropriate stance is to wait and see the effects of tightening. He also stated that if he was to vote now, he would back no change in rates for the June decision.

Chicago Fed President Goolsbee stated that there is a lot of impact from prior rate hikes still to come. He added that his vote for a rate hike last time around was a close call and he maintained a relatively dovish stance. Minneapolis head Kashkari stated that inflation is much, much too high, but it is starting to come down.

House of Representatives majority leader McCarthy stated that the White House is not taking anything seriously on the debt ceiling.

Treasuries rallied after the US New York manufacturing data but failed to hold the gains which limited potential selling on the US dollar.

The latest batch of Chinese data was weaker than expected with industrial production growth held at 5.6% in the year to April from 3.9% previously and below expectations of 10.9%. Retail sales growth surged to 18.4% from 10.6% previously, but below expectations of 22.0% and the yuan edged lower.

US yields overall drifted lower in Asia and the dollar traded just below the 136.0 level against the Japanese currency.


There were no significant data releases on Monday with Sterling monitoring global risk conditions closely. Equities were able to make some headway which provided an element of demand for the Pound. After finding support below 1.2450, Sterling managed to make gradual headway against the US dollar and edged above the 1.2500 level against the dollar. The Euro also retreated to below the 0.8700 level.

Bank of England chief economist Pill stated that the bank needed to guard against inflation sticking above 2% in a 4-5% range.

The rhetoric maintained expectations of a generally hawkish policy stance by the central bank and Sterling held above 1.2500 against the dollar.

UK labour market data recorded a slightly higher unemployment rate and a dip in employment while the economic inactivity rate declined on the month. Wages growth was little changed on the month with underlying growth held at 5.8%. Sterling dipped back below 1.2500 against the dollar amid doubts whether further interest rate increases will be needed to combat underlying inflation and the Euro was able to regain the 0.8700 level.


Swiss sight deposits declined to CHF520.1bn in the latest week from CHF525.6bn the previous week. The decline in deposits on the week suggested that liquidity conditions were calm in global markets with the National Bank content to see tighter conditions. The annual increase in producer prices slowed to 1.0% for April from 2.1% previously. The Euro edged lower during the day to around 0.9730 while the dollar retreated to near 0.8950 with little net change on Tuesday.

Technical Levels 

Tables 1 (138)

Economic Calendar

Fx Daily Calendar 16052023



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